The Blog

Meet the New Chairman

Ben Bernanke is no Alan Greenspan--but that's not a bad thing.

11:00 PM, Oct 31, 2005 • By IRWIN M. STELZER
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That is only one reason that Bernanke is believed to be more relaxed about the outlook for inflation than Greenspan has been. He is on record as believing that high oil prices have so far not seeped into the prices of other goods, consistent with his reputation as an inflation "dove." When Bernanke served on the Fed board he was so concerned that American might slip into a Japan-style deflationary spiral that he pushed for the round of interest rate cuts that brought the Fed funds rate down to 1 percent. He even went so far as to suggest that the Fed had more than one way of fighting deflation--it could throw money out of helicopters. This has unnerved notoriously humorless investors and traders, and will undoubtedly be a source of merriment at Bernanke's confirmation hearings.

One thing that has been overlooked is Bush's sigh of relief. Time has finally freed him of a turbulent Fed chairman, one who persisted in calling for spending cuts to match tax cuts. Bush, already up to his knees in alligators, to use the regional vernacular, is counting on Bernanke for studied silence on that front.

Irwin M. Stelzer is director of economic policy studies at the Hudson Institute, a columnist for the Sunday Times (London), a contributing editor to The Weekly Standard, and a contributing writer to The Daily Standard.